WASHINGTON TALK: WORKING PROFILE: Clayton K. Yeutter; A Trade War Veteran With Tales to Tell

By CLYDE H. FARNSWORTH

Published: February 14, 1987

WASHINGTON, Feb. 13—
Clayton K. Yeutter, the United States Trade Representative, told a story about himself the other day.

At a recent conference in San Francisco, he said, he was faced with demonstrators waving a banner reading, ''Save NATO. Dump Yeutter.'' The protest, he explained, signaled the concern in some quarters over aggressive American trade policies and, by implication, concern about the man behind much of that approach.

Just before going to the West Coast, Mr. Yeutter threatened the European Community with 200 percent duties on wine, gin, Cognac, cheese and other products to compensate the United States for $400 million in grain sales lost to Spain as a result of Spain's joining the community last year. The Europeans, in turn, threatened to cut more of their imports from the United States and bring on a trade war that could blow up the 38-year-old Atlantic alliance.

But before a Washington-imposed deadline of Jan. 30, Mr. Yeutter and his Brussels counterpart, Willy de Clercq, signed a pact. The United States received full compensation from the 12-nation bloc.

Mr. Yeutter (rhymes with fighter) told the story about the demonstrators to the House Ways and Means Committee in an effort to illustrate the kind of impact he is having as this country's chief trade spokesman. Wide Grin, Mock Swagger

He related the tale with a wide grin and a bit of mock swagger, and he could not have had a more appreciative audience. Given the strong protectionist pressures in their constituencies, the legislators seem to have a strong affinity for a macho man as the nation's trade representative, especially one who can head off punitive, protectionist legislation through negotiated agreements.

''I admire the way you handle the job,'' said Representative J. J. Pickle, Democrat of Texas.

''You're a breath of fresh air in this Administration,'' added Representative Beryl Anthony Jr., Democrat of Arkansas.

Mr. Yeutter goes down less smoothly abroad. Europeans find the deadlines that he is always setting to resolve trade conflicts ''unhelpful,'' said Ella Krucoff, spokeswoman for the European Community in Washington. But, she added, he is ''respected'' by European officials.

Mr. Yeutter, a beefy Nebraskan who speaks rapidly, off the cuff and in a voice that some have compared to a hog-caller's, occasionally puts his foot in his mouth, at least in the judgment of his critics. Last week, for example, he created a firestorm in Canada when he told a Brookings Institution seminar that Canada should be prepared to risk losses of its culture in any free trade pact with the United States. 'Stunningly Ignorant'

The incident caused barely a ripple here, but it filled Canadian newspapers and, in Parliament, Prime Minister Brian Mulroney accused Mr. Yeutter of being ''stunningly ignorant'' of Canadian cultural sensitivities. The Canadians fear being economically and culturally overwhelmed by the United States should a freer trade agreement emerge between the two countries later this year.

In 19 months in office, Mr. Yeutter has managed to become one of the more effective holders of the key Cabinet-level trade office, in spite of, or perhaps because of, his directness.

He does not have a close personal relationship with President Reagan, yet he has especially good rapport with Treasury Secretary James A. Baker 3d, the Cabinet's economic spokesman and chairman of the Economic Policy Committee, where the key decisions are taken.

Of more than 100 issues that have come before the policy committee since Mr. Yeutter replaced Bill Brock, now Labor Secretary, in July 1985, only one of Mr. Yeutter's recommendations was rejected. This related to shoes.

Along with most other economic officers of the Cabinet, key legislators and the International Trade Commission, a Federal fact-finding agency, Mr. Yeutter recommended protection for the shoe industry. The President went against the advice in a decision in September 1985.

''Yeutter's been able to work well within the economic policy framework,'' said I. M. Destler, senior fellow at the Institute for International Economics. ''As the guy in the middle, between the Hill on the one hand and the foreign governments on the other, he's doing a good job under difficult circumstances.''

On his watch Mr. Yeutter has seen the trade deficit reach into the stratosphere and protectionist clamor grow. In response, the Administration has shifted from a policy of strictly free trade to a politically more realistic policy of trade enforcement.

Thanks to an initiative of Mr. Yeutter and Commerce Secretary Malcolm Baldrige, the Administration is fighting unfair trade for the first time under Section 301 of the Trade Act of 1974. This rarely used provision allows Washington to restrict access to the American market for countries that maintain trade barriers against the United States.

More than a dozen such cases have been brought. As a result, markets in Japan have been opened for tobacco; markets in Taiwan have been opened for beer, wine and tobacco, and markets in South Korea have been opened for insurance.

''To the extent that Congressmen are convinced that Administration officials will vigorously defend U.S. trade interests, the more likely it is that they will desist from imposing unilateral trade restrictions on their own,'' said Sam Nakagama, a Wall Street economic analyst. Talks on Global Trade

In another key move to deflate protectionism at home, Mr. Yeutter persuaded 92 nations to agree to start discussing ways to ease global trade, and these talks are now moving forward. Here again the idea is that if other countries open their markets, the United States can avoid having to close its own.

Working with Mr. Baker and Mr. Baldrige, he has also altered the Administration's legislative strategy. Last year the President refused to send Congress a trade bill. Next week he will send up nearly 2,000 pages of legislation both to sharpen trade law and improve competitiveness.

''Last year there was such a thrust toward protectionism that we saw no real possibility of sensible, responsible trade legislation emerging,'' Mr. Yeutter said in an interview. ''It would have been Christmas-treed with protectionism and a veto would have been inevitable. We came to a different conclusion this year. Chances of responsible legislation are substantially higher.''